The Port of Greater Cincinnati Development Authority outbids Wall Street to buy houses in Cincinnati

Arts and retail focused community development corporations.  In "Revisiting stories: cultural planning and the need for arts-based community development corporations as real estate operators" I argue that to best buy, hold, develop, and maintain arts-related uses you need an arts and culture focused community development corporation (or the city or county government) to act at the city-wide/county scale.  

The Pittsburgh Cultural Trust, the Playhouse Square Development Corporation, and Jubilee Housing of Baltimore (focused on live work housing) are particularly good examples.

In "The SEMAEST Vital Quartier program remains the best model for helping independent retail," I state that SEMAEST in Paris is probably the best example of a city-chartered authority doing this.  Their focus is on maintaining independent retail.

Transit and real estate appreciation.  Transit focused community development corporations.  Similarly, in the face of real estate price increases in response to new transit infrastructure, I've suggested that a CDC could operate similarly, wrt both commercial and residential property, specifically for the Purple Line in Suburban Maryland ("Purple Line Corridor Coalition study: Same Old, Same Old | Gentrification will result from investment in transit infrastructure"). 

Sadly, wrt the Purple Line I first suggested this in 2007.  Fifteen years later, still no action.

Historic preservation.  Same for historic preservation.  The best way to arrest the possible demolition of a property is to buy it.  Having revolving funds and other mechanisms to be able to respond quickly to do so solves the problem ("Saving urban corner stores needs public assistance: Mott's Market on Capitol Hill, Washington, DC ").  

In Cleveland, not so much lately, the Cleveland Restoration Society was a leader in buying properties, sometimes using receivership statutes to cure notorious nuisances, rehabilitating them, and selling them at a loss if necessary, as a stabilization measure. Other preservation groups have done this similarly in places like Macon, Georgia, and Galveston, Texas. 

Serendipity and opportunity. And in my writings on "transformational projects action planning," one of the points about successful wide-scale revitalization programs is that there needs to be serendipity and the ability to seize opportunities as long as they fit within the outline of the master plan ("Why can't the "Bilbao Effect" be reproduced? | Bilbao as an example of Transformational Projects Action Planning").  

1. A commitment to the development and production of a broad, comprehensive, visionary, and detailed revitalization plan/s (Bilbao, Hamburg, Liverpool);
2. the creation of innovative and successful implementation organizations (Bilbao, Hamburg, Liverpool, Helsinki);
3. strong accountability mechanisms that ensure that the critical distance provided by semi-independent implementation organizations isn't taken advantage of in terms of deleterious action;
4. funding to realize the plan;
5. integrated branding and marketing programs to support the realization of the plan (Hamburg, Vienna, Liverpool, Bilbao, Dublin);
6. flexibility and a willingness to take advantage of serendipitous events and opportunities and integrate new projects into the overall planning and implementation framework (Bilbao, Liverpool, Helsinki).
   

Two examples of serendipity come from Bilbao.  First, in getting the Guggenheim Museum to open there, after Graz, Austria rejected their proposal.  Second, once the Museum opened recognizing that in addition to the subway, they need better surface rail transit (tram/streetcar) to serve the Museum District, and they got it running within a few years--one-third of the time it took DC to open a streetcar line.

Bias for action.  I guess this presupposes that the agency is predisposed to act instead of sit around.  I've written "bias for government inaction" is a problem, that government agencies aren't always that proactive, and tend to not have much of "a sense of urgency" when it comes for a need to act.  

Winston Churchill is famous for the quote:

You can always trust America to do the right thing... after she has exhausted all other alternatives.

Now, the bias is to not act, often because of ideological grounds, and an unwillingness to come up with the money for the change, even if the cost of not acting is much more expensive.

Housing market, venture capital and single family housing as rentals.  Since the 2008 Recession, Wall Street venture capital firms have developed large portfolios of single family housing, converting the properties to rental from owner occupied.  This was facilitated by banks wanting to simplify their REO (real estate owned) portfolios created by rampant foreclosures.

Because financiers have quick access to large amounts of capital, they can generally offer better terms than any individual or small company.  This has changed the nature of the real estate market in many communities, especially weaker markets.

A home recently purchased by The Port of Greater Cincinnati Development Authority.Jeff Dean for NPR.

Cincinnati.  The Port Authority in Cincinnati, recognizing that it is chartered as a community development corporation, realized it could step in and compete against venture capital and acquire REO portfolios ("It's harder to buy a house. This city fought back by outbidding corporate landlords," NPR).  From the article:

So when that California company, Raineth Housing, went under, the Port moved to buy up its properties scattered around Cincinnati. It's a first — she doesn't know of any other public agency like hers in the U.S. that's done it — and it's risky.

Brunner says the agency outbid 12 other investors, taking on $14.5 million in debt for those 194 homes. It has since paid $2 million more toward fixing them up.

Because large institutional owners are not usually committed to local communities, they may run the properties poorly (some do, others don't), so local ownership can also be an opportunity to improve the house and stabilize the neighborhood. ...

It's a challenge to fix up homes and keep sales prices low

The Port's purchase price per home averages out to roughly $78,000. But the amount it will sell them for depends on how much it has to spend to fix them up. And once the agency was able to look inside all 194 homes, it was clear many needed a lot more work than expected.

Their intent is to keep the properties as affordable, and that ideally they can sell them to tenants.  But this is complicated by the poor condition of many of the properties.

Conclusion.  The Port Authority in Cincinnati illustrates my points about having a (1) community development corporation or similar entity already created (2) that is ADEQUATELY CAPITALIZED, (3) with the wherewithal to act when important, transformational opportunities are presented.